AUSTRAC issued infringement notices to eight businesses across various industries during March 2024 for failing to submit their 2022 compliance reports. Sole traders were each fined $3,300 (equivalent of 12 penalty units), while companies were each fined $16,500 (equivalent of 60 penalty units). While AUSTRAC has previously taken enforcement action for failures to have robust AML/CTF programs and to report certain transactions, this is the first time AUSTRAC has publicised its enforcement action with regard to failures to submit compliance reports.
The Obligation to Submit an Annual Compliance Report
It is a requirement under section 47 of the AML/CTF Act that a reporting entity must, between 1 January and 31 March each year, submit a compliance report on how it has performed its AML/CTF obligations during the preceding calendar year. Unless special circumstances or exemptions apply, reporting entities must submit an annual compliance report each year.
How to Prepare and Submit the Compliance Report?
Licensees must ensure that the compliance report is submitted via the AUSTRAC Online account before 31 March in respect of the previous year. Once the lodgement period closes, there is no provision within the AML/CTF Act that allows AUSTRAC to reopen a report, accept late submissions or approve extensions.
AUSTRAC will send notifications to remind reporting entities to submit the report once the submission window opens on 1 January. Accordingly, it is important for reporting entities to ensure that the contact details in their AUSTRAC Online account are up-to-date, especially the email addresses of the nominated AML/CTF Compliance Officer and other primary contacts.
The compliance report consists of a series of questions that are aimed at helping AUSTRAC understand whether and how well a reporting entity is complying with various AML/CTF obligations in the course of carrying on its business. The questions from the 2023 Annual Compliance Report can be found here.
Consequences for Failing to Submit a Compliance Report on Time
As the recent infringement notices shows, there are severe consequences for failing to submit your compliance report. AUSTRAC also has the power to issue a remedial direction for such failures.
Reporting entities should be aware that AUSTRAC is closely monitoring business activities across the financial, bullion and gambling sectors, and will not hesitate to take enforcement action where it believes on reasonable grounds that a reporting entity has failed to submit a compliance report by the due date.
AUSTRAC's close scrutiny and willingness to impose civil penalties for non-compliance with the annual reporting obligation serves as a clear warning that businesses must take their AML/CTF obligations very seriously. Find out more about other AML/CTF ongoing reporting obligations here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.